What drives an innovative, IT economy?

01 May 2012 | Juliano Tubino, Worldwide Director, Innovation and Emerging Business

​At Microsoft, one of my primary roles is leading our Local Software Economy initiative, which aims to accelerate the development of innovative software industries worldwide. The initiative—which is also a passion of mine—involves working closely with entrepreneurs to help them foster the skills, IT solutions, partnerships and, ultimately, businesses that will have a large impact on their local economies. This impact can be measured by job creation in the places these entrepreneurs call home, more diverse and innovative economies, and burgeoning software industries driven by an entrepreneurial spirit.

Since I first began working on the Local Software Economy initiative, I’ve had the privilege to speak with countless entrepreneurs, listening to their ideas and future plans, as well as discussing what they need to make their dreams a reality. From these conversations, what I keep hearing about is how closely government is tied to their success.

By providing environments that promote entrepreneurism and, more specifically, IT innovation, what’s clear is that governments are often the initial catalysts behind strong local software economies. So, how can governments become better stewards of these economies?

That’s a big question, and one that I plan on addressing in a series of future blog posts on the topic. However, a good starting point is to examine what we believe are the 10 most important elements that drive a nation’s local software economy and foster emerging businesses within this sector. Today, we’ll look at the first five. Be sure to check back again soon for my second installment.

1. Demand

While it may be somewhat obvious, the level of a nation’s expenditures on information and communication technology (ICT) investments has a large impact on the current and future market potential for local software economies. In fact, there’s an emerging body of research that links countries’ overall economic competitiveness and GDP growth to their level of investments in ICT. We’ve even performed some informal research of our own on this topic.

2. Education system

Education, as in virtually all other sectors, is critical to a nation’s economy and sustainability. Access to education and government investment in education programs are critical. In the IT sector, education in science, technology, engineering and math (STEM) disciplines are particularly important. Learn how Microsoft is extending STEM learning opportunities.

3. Government readiness

Where countries rank in e-government can also have a big impact on their ability to encourage IT entrepreneurism. Are services and applications for new businesses made available online? Are government systems interconnected to provide a seamless user experience? Or, are these still paper-intensive, involving redundant systems and processes? The answers to these questions will largely influence how well (if at all) entrepreneurs navigate through the process of starting a new business.

4. Firm-based innovation

The level of innovation that IT businesses possess dramatically impacts their ability to compete in an increasingly global economy. While this is often influenced by internal factors such as research and development, governments can participate by establishing public-private partnership programs aimed at spurring innovation. Learn how programs like the Microsoft Imagine Cup challenge are helping fuel creative thinking among tomorrow’s tech leaders.  Access to venture capital also plays a critical role in financing innovation and entrepreneurial risk-taking. Establishing economic policies that encourage this investment is another way that governments can lay the groundwork for more innovative IT businesses.

5. Infrastructure readiness

As businesses are often a reflection of the countries in which they operate, one can appreciate how emerging IT companies are largely influenced by their access to the infrastructure and resources available in their countries. Over the past decade, access to Internet has become the foundation for commerce. As such, nations that invest in providing high-speed and widely accessible broadband technologies offer a significant advantage to local IT businesses. However, with newer technologies such as Super Wi-Fi, the playing field is starting to level off, allowing emerging countries to invest in comparable broadband technologies at a much lower cost.

Have a comment or opinion on this post? Let me know @Microsoft_Gov. Have a question for the author? Please e-mail us at ongovernment@microsoft.com.

Juliano Tubino
Worldwide Director, Innovation and Emerging Business

About the Author

Juliano Tubino | Worldwide Director, Innovation and Emerging Business

Juliano leads the company's Local Software Economy initiative, helping startups build software skills, solutions, and businesses that drive their local economies. His team oversees 110 Microsoft Innovation Centers in 42 countries around the world.